Retirement should be about more than just ‘getting by’

More than 100 years ago, female factory workers in Chicago campaigned
for the right to vote and wondered how it could deliver them not only a
“living wage” but life’s roses.

Their catchphrase,‘Bread for all and roses too’ – with bread representing home, shelter and security and the roses representing music, education, nature and books – went on to inspire generations of American women, particularly those involved in industrial action during the 1930s.

The
notion that the humblest workers have a right to live, not just exist,
is just as relevant today. Australia is one of the wealthiest nations on
Earth and we all deserve a share of the enormous economic gains of the
past century.

There is no stated objective for our retirement income system in our law. However, the community has strong views on what the objective and features of our retirement income system should be.

Research commissioned by Australian
Institute of Superannuation Trustees (AIST) found that more than eight
in 10 Australians believe the government should make sure super and the
age pension are set high enough so that all Australians have a decent
life, free of financial stress, in retirement. This finding is
consistent across education levels, geographic location, and voting
preference.

Our
polling suggests that what most people want in retirement is no
different to what the Chicago suffragettes wanted – to enjoy life, not
just “get by”. For most ordinary older Australians this means being able
to enjoy a weekly coffee and cake with friends, to afford home
maintenance, the internet, a car or a footy club membership. They’re not
asking for gilded luxury.

In the lead-up to the Retirement Income
Review, it’s been suggested that the government’s legislated timeline
to increase the compulsory super rate to 12 per cent by 2025 should be
halted because the current super rate is enough.

But the modelling done by some researchers who reached this conclusion was based on a full-time male earning above median wages working continuously for 40 years. This is not the lived experience of a great many Australians – potentially more than half the working population. This includes women taking time out of paid work to care for children and family, low-income earners, those priced out of home ownership, many Indigenous Australians, single people and a large cohort who retire involuntarily due to ill health or the inability to find a job in later years.

It
has also been argued by some – including a group of Coalition MPs (who,
incidentally, receive more than 14 per cent super from their employer)
that low-income earners should be excluded from compulsory super and
left to fend on the age pension. Meanwhile, the Save our Super lobby
group – which also argues that a super rate of 12 per cent is too high
for people on low incomes – has called for the $1.6 million tax-free cap
on pension accounts to be abolished or raised to boost retirement
income for Australians with more than this amount in their super.

There
is no shortage of opinions on how super and the age pension should work
together. Despite the age pension having been around since the early
1900s and compulsory super for three decades, we still lack consensus on
whether super is there to supplement or substitute the age pension. But
surely one thing we should all agree on is that in egalitarian
Australia, the land of the fabled fair go, all Australians, regardless
of income or address, have contributed to our nation’s success and
deserve a decent life when they finally lay down their tools.

Eva Scheerlinck is CEO of the Australian Institute of Superannuation Trustees.

Sunday, March 15, 2020

Important Notice (6 May 2020):

Neither Save Our Super nor Jack Hammond QC has any connection with any of the following persons, organisations, websites, hashtags or email accounts: